The current trouble of General Motors and the American automobile
industry is a quintessential symptom of decline, and it needs to
be recognized as such by American business leaders -- at least by
those business leaders with an interest in the future of their
industries and in the future of this country.
At the end of the Second World War, American industry in general,
and the American automobile industry in particular, had absolute
supremacy on this planet.
We were the world's producer and the world was our market.
So what happened?
A close look at the history of American business in the 19th and
20th centuries maybe tells us a great deal about the origins of
our decline.
In the 19th century, America was not yet an industrial giant but
was on its way because of a population of hard-working people
coupled with a continent rich in natural resources. But these
hard-working people were for the most part also uneducated,
unsophisticated, and extremely gullible. It's not an accident
that snake oil salesmen, carnival barkers, hucksters, con men,
liars, crooks, and fast eddies thrived in businesses legitimate
and illegitimate. The slow method to accumulate capital between
1890 and 1940 was to work hard, be frugal, and invest wisely. The
quick method was to bluff and cheat your way to a fat bank
account. And to help the quick way in all its details, we
invented bluff-and-cheat American advertising.
Bluffing and cheating gullible Americans was a lucrative game
played by smirking con men in three piece suits. In the free
market jungle, hucksters sold rancid butter and said it was as
fresh as a new daisy, sold doctored milk and said it was pure,
sold defective autos and said freedom means you're free to buy a
lemon.
The automobile "lemon" was invented by Americans: it never
existed anywhere else as a misery to be dumped on gullible
consumers.
Bluff-and-cheat American advertising, and its sponsor, bluff-and-
cheat American business, were the worms that crept into the
vitals of the American business psyche, took hold, brought rapid
success to some people, but also started a rot that will in the
long run put us in third place behind Europe and China.
No country can survive long as a leading producer of goods when
its reputation is based on superior bluff-and-cheat advertising
rather than on superior quality of its goods.
No corporation can survive long when its market share depends on
superior bluff-and-cheat advertising rather than on superior
goods and services.
The bluff-and-cheat script used by American business worked so
well in foreign markets for the first 40 or 50 years after World
War II for one simple reason: we had no competition because every
other industrialized country had been wrecked by war.
Now we do have competition -- and plenty of it.
Silly third-rate managers of American corporations whine that our
decline is caused by increased labor costs. But if people around
the world really wanted our products, they would pay enough to
sustain the increased labor costs -- which merely represent
American labor sharing in the wealth of the nation.
Until the people around the world believe that American
automobiles are the best made in the world, the whining of
American managers about labor costs is ridiculous.
The problem is not cost of labor, the problem is the lack of
quality of our goods and services and our stupid belief that
bluffing and cheating are the way to do business.
These days, anyone who buys a pair of pliers knows that such
tools made in China are of better grade steel, are made better,
and provide more value for the money. American businesses have
lost their market.
We shouldn't cry as Europe and Asia flush this or that American
industry down the tubes. American business people and American
advertising people, a collection of barely educated pompous
third-rate managers, are the people who blew up the balloon that
will ultimately pop in our faces.
And of course they will bluff and cheat as they go down -- they
will tell us it's the fault of American labor.
What else do you expect from bluffers and cheaters?